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Environmental assessment could cost firm $2 million.

Environmental assessment could cost firm $2 million

The environmental assessment (EA) process for the Duport gold deposit in northwestern Ontario will most likely take several more months to complete, increasing the pre-production costs to more than $1 million.

"I expect that we'll spend another $1 million before we see any light," says Dick Dunlop, president of Consolidated Professor Mines Ltd.

Consolidated Professor has spent almost two years attempting to secure permission to bring the gold deposit into production. The deposit is located on Stevens Island in Shoal Lake, about 55 kilometres southwest of Kenora.

A feasibility study on the project recommended undertaking a cut-and-fill operation at an existing mine on the island and processing the ore on the mainland.

However, the city of Winnipeg draws its drinking water from Shoal Lake, which straddles the Ontario/Manitoba border. City officials, who are concerned that the mine could pollute that source, called for the EA and have started to bring political pressure to bear on the project.

Dunlop says that while his proposal is progressing through the EA process in Ontario, the federal government, through the Federal Environmental Assessment Review Office (FEARO) has indicated that it wants to conduct an independent assessment.

"If this is the case, I believe it will be onerous," says Dunlop. "I don't want to go through a second assessment."

However, there is a possibility that the assessments could be jointly conducted.

Dunlop says he is waiting for word from FEARO officials about whether the federal agency will enter into a joint-review process with the province. If it does, Consolidated Professor may have to submit its initial EA to the federal Department of Fisheries and Oceans.

By his own estimation, Dunlop believes that the assessment process has already cost his firm approximately $750,000. He believes the figure will increase dramatically once the public hearings begin.

"The public hearings take place in a very adversarial courtroom setting," Dunlop notes. "You can just imagine what it costs for lawyers and in court fees."

Since the discovery of the deposit in 1897, approximately $21 million has been spent on Shoal Lake by previous owners such as Ventures Limited and Duport Mining Company, which amalgamated with Consolidated Professor in 1981.

Adding to Dunlop's anxiety is the fact that the EA process was never designed to accommodate smaller, private-sector developments. Because the province provides funding for groups which are granted intervenor status, Dunlop could find his corporate coffers battling the government's treasury.

In addition, the delays caused by the EA process make it difficult to raise capital for the $53-million project, according to Dunlop.

He says it took 10 months rather than the promised two months for the environment ministry to formulate the initial terms of reference.

Shoal Lake has reported probable reserves of 902,400 tons of ore with an average grade of .35 ounces of gold per ton. However, its production costs are estimated at $400 per ounce. At press time gold was fetching a little more than $360 per ounce.

POLITICS

Dunlop believes that the federal government has become involved in the environmental assessment process because of pressure put on such high-ranking Manitoba members of the House of Commons as Jake Epp and Lloyd Axworthy.

While Manitoba officials are lining up against the proposal, Ontario provincial leaders have given their muted support to Consolidated Professor.

Late last year Ontario Mines Minister Gilles Pouliot said he supported the project as long as it doesn't affect Winnipeg's water supply.

Dunlop and the leaders of Shoal Lake Bands 39 and 40 have also met with Premier Bob Rae in an effort to gain his support.

The Native leaders also have a stake in the project. Under an agreement between the two bands and Consolidated Professor, 45 of the proposed mine's 175 jobs will be filled by members of the bands.

PHOTO : Seen here from above is Consolidated Professor's Duport Gold Mine on Shoal Lake, the subject of a costly environmental assessment.
COPYRIGHT 1991 Laurentian Business Publishing, Inc.
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Mining Report; Consolidated Professor Mines Ltd.
Author:Krejlgaard, Chris
Publication:Northern Ontario Business
Date:Jun 1, 1991
Words:659
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